Bill Frezza is a 35-year veteran of the technology industry. After graduating from MIT with degrees in both science and engineering, Bill spent his early years at Bell Laboratories. Since then, he has worked as a product manager, salesman, marketer, entrepreneur, consultant, technology evangelist, and venture capitalist. Bill holds seven patents and has been investing in early-stage tech startups for the last 17 years as a partner in a venture capital firm. Since 2008, he has been writing weekly opinion columns for publications such as RealClearMarkets.com, Forbes.com, the Huffington Post and Bio-IT World and appeared regularly on TV and radio outlets, including CNBC, Fox Business and WBAL. In 2011, he was a finalist for the Hoiles Prize for excellence in American journalism and in October 2013, he became the Competitive Enterprise Institute’s 2013-2014 Warren T. Brookes Journalism Fellow. In January 2014, Bill began hosting RealClear Radio Hour airing Saturdays on Boston’s WXKS 1200AM & WJMN 94.5FM-HD2.

Governor Walker's Victory Spells Doom For Public Sector Unions

Public sector unions have reached their high water mark. Let the cleanup begin as the red ink recedes.

Despite a last-minute smear campaign accusing Scott Walker of fathering an illegitimate love child, the governor’s recall election victory sends a clear message that should resonate around the nation: The fiscal cancer devouring state budgets has a cure, and he has found it. The costly defeat for the entrenched union interests that tried to oust Walker in retribution for challenging their power was marked by President Obama’s refusal to lend his weight to the campaign for fear of being stained by defeat. We’ll see how well this strategy of opportunistic detachment serves in the fall as Obama reaches out to unions for support.

This fight is not without precedent. Progressive patron saint Franklin Delano Roosevelt—who more than any other president set our country on a course away from the founding principles of limited government—knew that public sector unions would be the death of the social welfare state he worked so hard to create. Hence, he consistently opposed allowing government employees to unionize. Today, Greece sets the example of what happens when public sector unions gain the upper hand.

In 1959 Wisconsin became the first state to allow collective bargaining by government employees. The projected cost of supporting Baby Boomer union retirees now threatens to bankrupt the state, as it does many others. Scott Walker ran for office promising change. The fiscal medicine he is administering may be bitter, but it looks like it is starting to work. The state budget has been balanced. The unemployment rate has been dropping and is now below the national average. Property taxes are down. Fraudulent sick leave policies—which allowed employees to call in sick and then work the next shift for overtime pay—have been ended. The government has stopped forcibly collecting union dues from workers’ paychecks.

Best of all, the myth that union bosses represent their members’ interests has been exposed as a lie. Now that union dues are voluntary, tens of thousands of union members have stopped paying them. Membership in the Wisconsin chapter of the American Federation of State, County and Municipal Employees union (AFSCME) has dropped by half. Membership in the state’s American Federation of Teachers (AFT) is down by over a third. Given unions’ influential role in most elections, the national implications of this trend are staggering.

Walker’s message is clear: The key to bringing balance back to public sector labor relations and balance state budgets is to break the iron triangle of closed-shop mandatory unionization, compulsory dues collection, and oversized campaign donations to politicians that promise to do the unions’ bidding. If other governors take his cue and take up the cause, that giant sucking sound you hear will be the air coming out of union bosses’ bloated political action budgets.

The work in Wisconsin is not complete. The controversial law exempted police and firefighters, a political concession to get the legislation passed. Federal courts have zeroed in on this anomaly, striking down certain sections of the law because they do not treat workers equally. This needs to be repaired— by rescinding the exemption for public safety workers. With the recall election behind him, Walker may be sufficiently emboldened to do just that.

The power of private sector unions was long ago broken by many heavily unionized companies going bankrupt. While this was painful for both workers and shareholders, the economy motored on as nimbler non-union competitors picked up the slack. This approach is problematic for the public sector because bankrupt state and local governments cannot be replaced by competitors waiting in the wings. Yes, citizens can always vote with their feet, emptying out cities like Detroit, leaving the blighted wreckage behind. But isn’t Walker’s targeted fiscal retrenchment less painful than scorched-earth abandonment?

Chicago machine candidate Barack Obama rode into office to the tune of Hail to the Chief, promising the unions that backed him the gift of card check elections, ending the secret ballot that shields employees from union intimidation. He may well ride into retirement to the tune of On Wisconsin as the era of closed shop unionism comes to an end.

Bill Frezza is a Boston-based writer and venture capitalist. You can find all of his columns, TV, and radio interviews here. If you would like to have his columns delivered to you by email, click here or follow him on Twitter @BillFrezza.

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Walker deserves to keep the Governors’ seat. His policies, along with his Budget Repair Bill, paid off the deficit, balanced the state budget, and brought the state from the brink of bankruptcy to a good place to do business. I am a firm believer that everything happens for a reason. This recall re-election is about right and wrong, not political parties. The recall action was painful for the state as a whole. The giant public union “snit” wounded practically every community. While their non-public union neighbors were suffering one or more of any number of economic losses in this dismal economy, the public unions vociferous reaction to Walker’s common sense reforms told the average joe that public union employees were a protected class. The taxpayers found out just how generous their benefits were; even after the changes their benefits are still way out of line with comparable private sector employment. Who provides a defined benefit retirement plan today, with no employee contributions? Is it unreasonable to expect people to contribute to their own retirement? Who pays just 5% of their medical premiums? Is it unreasonable to pay 12% when comparable private sector employees pay upwards of 30%? The union demands were completely unsustainable. Walker’s successful emergence from this recall election is a repudiation of public unions, no more, no less. We can only hope for healing now.

From reading the leftist comments here it is clear. Liberalism cannot be voted out, reasoned with or isolated and contained. It must be shot in the head, and have a stake driven through its heart. The compelling need to control others lives will never die, it is evil, and should be dealt with as such.

Boy you nailed it on this one. Public sector unions are dead. After their pitiful preformance here in Wisconsin they deserve to be dead. The supposedly mighty NEA, AFT, and AFSCME made an absolutely pitiful effort in this election.

It was actually funny to get several fundraising calls per day from the Walker supporters telling me how they needed money to fight the union thugs and radical liberals while living here and knowing there was no such liberal effort apparent to anyone in Wisconsin. Here we were buried under tens of millions of dollars of pro Walker adds for the last 9 months.

The unions were so weak they didn’t even identify the fact that the June 5 date would literally eliminate the college vote, and no effort was made to recover that loss.

One bad thing here is that with this destruction of the unions Wisconsin also suffered the destruction of the teaching profession. Unrecognized in this whole thing was that Wisconsin teachers were already paid wildly less than teachers in any surrounding state before the huge cuts. School costs were the one part of the state budget that grew much slower than inflation for the last 20 years.

Our local school, long known for academic excellence has cut a number of teaching positions but they still have numerous openings for which they cannot find any qualified applicants. A person would literally have to be unable to do simple math to take a teaching job here.

Now if they could do that in California we just might stand a chance of surviving; then the illegal aliens and the greenie hippies and we will be in the top 3 economies like we were. We are like eighth now.

Civil service lazy Unions have nearly bankrupted cities. About time they were told who they are. Last year in Milwaukee alone the union thugs spent $2 billion on their own healthcare. And who’s paying? TAXPAYERS! TEA! Down with corrupt criminal unions. Up with hardworking Americans.

US taxpayers owe govt union pensions over a trillion dollars, or about $19,000 per taxpayer. In San Jose ca, retiree benefits take up 25% of the cities budget. In Ill, pensions eat up 15% of the states budget, in San Francisco, 31% of the cities labor costs go to pay city worker pensions. In 2010, over 12,000 ret. California state workers were collecting pensions of $100,000 or more, with the highest over $500k/yr. While citizens are going to retire on a meager Social Security check (ave check is only $1177/mo.) govt retirees are retiring on $6000-$44,000 a month, most all of it from the tax payers pocket. Not only do we have to fund our own retirements, we have to fund the luxury pensions and benefits of govt. workers. How did this all happen? simple, unions fund the democrats, and democrats in return reward the unions with excessive labor contracts and bloated public works projects. It’s the biggest money laundering scheme in the world.

I am just hoping that this is just the beginning of the removal of all public sector unions – local, state, and federal. THE WORST THIS THIS COUNTRY HAS DONE, THAT HAS CURSED ALL NEW GENERATIONS OF TAXPAYERS AND PRODUCERS, IS TO UNIONIZE GOVERNMENT WORKERS! This needs to end before this country is completely destroyed. We are broke. Even if we weren’t broke, it is still a good idea.